News

May 2, 2008

PPL pushing legislation on phased-in rate hikes

In opposition to PUC move, company seeks law to get power firms behind plans.

On April 9, PPL Corp. was unhappy the state Public Utility Commission tabled the company’s plan to phase in drastic rate increases expected in January 2010.

But with less publicity, the company was working with its hometown senator to get a law crafted forcing power companies to submit similar plans to phase in expected rate increases when their rate caps come off. The bill was introduced by Republican state Sen. Patrick Browne, along with both Sens. Raphael Musto, D-Pittston Township, and Lisa Baker, R-Lehman Township.

Baker called it one of the various “realistic alternatives” Republicans are considering for mitigating rate increases.

Sen. Lisa Boscola, a Democrat from Northampton County, however, accused PPL of attempting to force increases that the PUC refused to address. “That’s what happens when you mix corporate greed and the arrogance to think you don’t have to play by the rules,” she said. “PPL will stop at nothing to raise their customers’ rates by 50 percent as fast as they can.”

Until 1996, all electricity charges in Pennsylvania were regulated. Then generation costs were opened to market prices but put under caps for about a decade. Some caps have expired and prices increased, including those of local UGI Electric Service, whose rates went up about 35 percent in January 2007.

But PPL is the first company to propose phasing in increases, projected at 35 percent or more. Voluntary customers would pay extra each month. The excess would be banked at 6 percent interest until 2010, when it would be used to cover the increased bills. Customers wouldn’t pay more until the account empties.

Others are considering a phase in. The caps for Penelec, Met Ed and Penn Power, which are all owned by FirstEnergy Corp., expire in 2011. Notwithstanding the legislation, FirstEnergy planned a phase-in proposal and is considering something “very similar to what PPL has to offer,” spokesman Scott Surgeoner said.

He and PPL spokesman George Lewis approved of the bill.

“We’re working with both the legislature and the PUC, and those efforts have to go forth in parallel,” Lewis said. “The timing of the bill’s introduction, that was just circumstantial. … Sen. Browne, the prime sponsor, asked for our input, but it’s certainly not something that we orchestrated.”

State Consumer Advocate Sonny Popowsky said power companies have to prove they’re buying the cheapest power.

The bill “is not a replacement for the bigger issues. … The more important question to me is what are we going to do in the long run to keep these rates in line, and right now the wholesale markets aren’t doing it,” he said. Companies “shouldn’t just throw their hands up in the air and say, ‘Well that’s the market price. Take it or leave it.’ ”

The PUC hasn’t taken a position on the bill.

PPL is the first company to propose phasing in increases, projected at 35 percent or more. Voluntary customers would pay extra each month.

Rory Sweeney, a Times Leader staff writer, may be reached at 970-7418.

Tweet	Follow @TLnews